Would you like to withdraw cash at your local supermarket/grocery store? Just to refresh reader’s memories. Way back in 2009, Reserve Bank of India, permitted Banks to offer cash withdrawal facility at POS(Point of Sales) Terminals.
During the last 5 years there was not much traction in this ePayments division. Banks like IDBI entered had offered the Cash@POS to their debit card holders. However, the transactions volumes were negligible and there were very few marketing campaigns by the Banks.
The Big Daddy of Indian Banking i.e State Bank of India plans to deploy over 1.25 lakh point-of-sale (POS) terminals in the next 18 months at various merchant outlets and counters at branches across the country.
POS terminals help customers carry out cashless transactions at merchant outlets by swiping credit/ debit cards on the POS machine.
Further, the terminals also facilitate withdrawal of cash (up to a maximum of Rs 1,000 a day according to existing RBI guidelines) using debit cards at designated merchant outlets.
As the merchant outlets have to be physically manned, the Cash withdrawal at POS terminals will help the merchants reduce the risk and costs associated with handling cash and also earn a small commission.
The terminals that SBI is planning to roll out will enable transactions using credit, debit and pre-paid cards. Besides, they will also support signature based, chip based and personal identification number based cards.
In its annual report, SBI said “In order to create a comprehensive electronic infrastructure in the country, activate the debit cards on PoS terminals, increase visibility and tap the huge potential available in the market, Merchant Acquiring business is being conducted by the bank.”
In line with RBI’s proposition to allow cash withdrawals through prepaid cards issued by banks from point of sale terminals, India’s biggest lender has come up with the Cash@POS facility across the country from last week that lets merchant shops act as ATM counters.
This helps customers to withdraw about Rs 100 to Rs 1,000 per debit card per day at any of this point of sale (PoS).
“Though the facility will be made applicable to all debit cards issued in India, to start with, we are rolling out the facility with SBI group debit cards,” said P.V. Rajamani, AGM, merchant acquiring business, of the bank.
This includes customers of State Bank of Travancore, State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Patiala and State Bank of Mysore.
Though RBI had permitted cash withdrawals at PoS terminals through debit cards way back in 2009, the service had not taken off owing to various reasons including lack of clarity on processing fee structures. In other countries, stand-alone cash withdrawal at POS terminals is not permitted. Bank customers have to club their purchase payments and cash withdrawals in a single transaction. However, in India, stand-alone cash withdrawals at POS Terminals are permitted. Hence, this is an attractive feature for merchant outlets to offer at their end.
For now, a convenience fee of one per cent of the transaction amount will be levied on the cardholder which can be anything in the range of Rs 7.50 to Rs 10. This convenience is less when compared with the cost of travelling to an ATM.
Merchants will be paid an incentive of Rs 5 for every successful transaction along with the cash paid to customers.
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